A Sound Investment

Steps to Ensure Financial Success

Oct. 28, 2013

Written by

Meghan Diemel, freelance writer

Credit card debt, medical bills, excessive household upkeep and repairs, and triplets – if those aren’t causes for concern when it comes to potential financial pitfalls in a marriage, nothing is. April and Kurt Reffke of Seymour have dealt with these issues while raising their children Lilah, Preston, and Corbin, 3, and they’re certainly not alone in their experiences.

Heather Karcz, certified financial planner and financial advisor associate with Zuehlke Karcz Financial Group of Stifel in Green Bay, says financial expectations and goals should always be discussed prior to marriage to ensure each partner is on the same page.

“Be aware of the other’s credit score, debt and assets before you walk down the aisle,” advises Karcz. “Finances can be a major cause of stress within a marriage. Imagine the resentment if you’re planning on building your first dream home together, only to find out your new spouse has $20,000 in credit card debt and a credit score that makes them ineligible for a mortgage.”

Karcz adds that you should review your beneficiary designations regularly, which is especially important with blended families.

“Perhaps there is a court order that requires an ex-spouse to remain as beneficiary on an account,” she explains. “If so, then evaluate whether additional assets should be dedicated to protect the welfare of the current family. It’s also important to title accounts properly and to understand how different account registrations can affect access to each other’s assets during life and after death.”

Savers vs. Spenders

Often, it seems, one partner is the spender and one the saver. A little communication goes a long way to preventing arguments, says April Reffke.

“I am a saver all the way; my husband is a spender. It is very difficult to compromise between the two, but we work together as a team, weighing out if something is a ‘need’ or a ‘want’ and how it will affect our family budget.”

“There needs to be communication and a give and take,” agrees Kurt Reffke. “It makes you think about if we really need things now or we save for them in the future, or if it’s needed at all.”

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Couples will sometimes choose separate checking accounts to allow each partner to maintain autonomy over their own cash flow, says Karcz. This situation works well when each individual agrees to responsibility for various household expenses. A common checking account often results in one spouse being the “driver” of the financial bus, she adds.

“Be careful to avoid the other spouse just being along for the ride,” Karcz states. “Both parties need to make the effort to understand household cash flow and monthly expenses. If something were to happen to the person that normally has control, the other spouse may feel completely lost, not knowing where to begin. It’s not uncommon to see couples have three accounts: His, Her, and Ours.”

While practicing their own healthy financial habits, the Reffkes have started to pass them on to their children.

“They each have a savings account and we always take them along to make deposits,” says April. “We talk about how that money is saved for a later time when they will need to buy things for themselves. We talk a lot about how much food costs when we eat, gas cost when we drive somewhere, etc.

“We make them aware that there are a lot of choices about money that you encounter on a daily basis – and the choices you make affect us all as a family,” she adds.

Five Financial Tips

Zuehlke Karcz Financial Group of Stifel in Green Bay offers a few tips for keeping the family finances in tip-top shape:

•Create a budget and operate within it.•Be open and honest with your partner about major expenditures. •Set financial goals together and determine your priorities. Both partners should understand the financial direction their family is headed.•Establish an Emergency Fund with enough liquid assets to cover six to nine months of living expenses. An unexpected crisis can occur at any time. •Engage the help of an experienced financial advisor to help get an investment plan in place and monitor your progress. Contact your legal or tax advisor for legal or tax advice regarding your particular situation. A competent advisor can help simplify what can be an intimidating topic, while also holding you accountable for your choices.